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TitleUnderstanding Data: Labor force status terminology and identities
AuthorPhillip Thorne
Question

For datasets that measure the components of labor force and related ratios, there is some variation in terminology among countries, but the mathematical relationships between components are constant.

Answer

Most national statistical agencies produce a periodic report framed as the labor force statistics (LFS) that includes, at a minimum, labor force status (also LFS) measures such as employment and unemployment, often broken out by industry (activity), and sometimes with more inclusive population measures for context. The report will have some combination of levels and rates (ratios); the particular combination varies by source, but the missing items can usually be calculated via identities. Many sources use definitions promulgated by the International Labor Organization (ILO).

The following short alphabetic codes are used to construct Data Buffet mnemonics, and serve to keep the identities concise. They are not ILO standards.

Levels

  • POP = population
  • NP  = not working-age population
  • WP  = working-age population
  • IP  = inactive population, out of labor force, not in labor force
  • LF  = labor force, economically active population
  • UN  = unemployed, unemployment
  • EM  = employed, employment
  • EP  = employees
  • UDE = underemployed
  • SE  = self-employed

Rates (percentages)

  • WR = EM/WP = employment to population ratio
  • PR = LF/WP = participation rate, labor force participation rate, LFPR, activity rate
  • UP = UN/WP = unemployment to population ratio
  • IR = IP/WP = inactive rate, inactivity rate
  • ER = EM/LF = employment rate
  • UR = UN/LF = unemployment rate

Identities

  • POP  = NP+WP
  • WP   = IP+LF
  • LF   = EM+UN
  • EM   = EP+UDE+SE
  • 100% = PR+IR = (LF/WP)+(IP/WP) = (LF+IP)/WP = WP/WP
  • 100% = ER+UR = (EM/LF)+(UN/LF) = (EM+UN)/LF = LF/LF